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It’s hard to call it a cottage when it has 11 bedrooms and eight bathrooms. Then there’s the tiered 18 seat home theatre, and four fireplaces.

But the 9,500 square foot property on Lake Muskoka comes at a cost: The new owners have to pony up $4,950,000 for the keys.

The property is one of the more expensive offerings on the recreational market in Ontario, where inclement weather has stalled sales during the crucial spring selling season. Except for one segment. Incongruously, Million dollar cottage sales look like they’re making a comeback.

“There are very few cottages like this for sale, it is an exclusive market,” said Cameron White, the listing agent on the property.

The owner, a Toronto area entrepreneur, purchased the unfinished property in mid 2000 and “took it to another level,” said White.

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The luxury cottage market is recovering in Canada after a bruising recession, although prices are still down from the peak, says a report by ReMax Ontario Atlantic Canada released Monday.

While housing markets remain stable in most metropolitan centres, recreational property, which is purely discretionary spending, has seen more of a dip, especially in the western provinces. In Ontario the market has been more stable, but prices are about 20 per cent off in some areas.

However, while the lower end and mid market remains flat, ultra luxury buyers are out looking again, thanks to the bounce back in the economy. Sales over the $1 million mark area already up by 11 per cent this year according to ReMax.

“You have buyers who have seen great equity gains in their homes from places like Toronto and they’ve made a killing on the stock market, so they are feeling very confident,” said Pamela Alexander, CEO, ReMax Ontario Atlantic Canada.

Alexander said ultra luxury properties were the first to take a hit during the recession and are as much as 20 per cent off their peak prices in 2007.

Realtor White says his $4.95 million listing would likely have sold for anywhere from $5.5 to $6 million during the peak.

“We saw a hefty run up in prices and then the market softened, especially on the big lakes,” said Alexander. “But it looks like demand is picking up because prices have softened, there are a lot more listings than normal, and interest rates are still low.”

While the Toronto area market remains hot, with some neighbourhoods reporting multiple offers, the same is not true in the rest of the province.

“When you leave the GTA, there are markets that are much softer out there,” said Alexander.

High prices in cottage country were fuelled by investors looking to buy a vacation home with all the bells and whistles. But this led to overbuilding in some areas.

Last year Red Leaves, the luxury resort on Lake Rosseau, saw some hotel condominium suites go into receivership.

When the project was first launched in 2005, studios were going for $299,000. Last year studios were selling for $166,000 or more than 40 per cent off. Larger units saw an even bigger discount.

Also contributing to higher listings are some American owners who are cashing out of cottage country, taking advantage of a higher Canadian dollar.

Some buyers may have purchased when the dollar was down as low as 62 cents (U.S.), and have now seen solid capital gains, said Alexander. Conversely, some Canadians may not be buying in cottage country because they are using that investment money to take advantage of the deals in the south.

“We aren’t seeing the same kind of foreign investment from European and American buyers, especially since Europe is looking shaky and the U.S. is still in a down market,” said Alexander. “In a recession people are considering their options and what they need to sell. Right now they have equity increases and a fantastic exchange rate, so some of them are putting their homes up for sale.”

Currently, there are more than 200 properties are listed on the big three lakes in the Muskoka area (Lakes Rosseau, Joseph and Muskoka) a favorite destination of Bay Street Bankers, NHL hockey players and some Hollywood stars.

Starting prices are back to the $500,000 range up from $450,000 last year, and around the same price as in 2008.

The most expensive property sold in the Muskoka area was on the south end of Lake Rosseau, priced at $3.495 million it has 4,500 square feet of living space and 220 foot of waterfront.

This was one of five sales over the $2 million mark reported this year.

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